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Feb 6, 2018 5:56 PMPublication: The East Hampton Press

Southampton Town Races Against The Clock To Finish Lobster Inn Purchase

The Lobster Inn
Feb 6, 2018 6:03 PM

Southampton Town’s decision to subdivide the Lobster Inn property in Shinnecock Hills—a move that would allow it to preserve some of the land as open space, while also permitting the operation of a shellfish hatchery in the future, and even a clam bar—appears to be jeopardizing negotiations with the owner of the waterfront lot.

Town officials had originally expected to close on the purchase of the 10-acre property in the fall, which actually consists of three adjoining parcels, including the former restaurant, using $8.5 million in Community Preservation Fund money. But the contract has not yet been finalized, a turn of events that has prompted the owners of the property, Peconic Bay Marina LLC and Peconic Bay Residence LLC, to begin soliciting other potential offers.

David Donohue, the listing agent with Douglas Elliman, explained in a recent interview that while he has been in constant contact with town officials over the past few months—he said they are doing what he described as their “due diligence” to get a contract finalized—the real estate broker is continuing to show the property to other potential buyers.

“The property is still available to be purchased,” said Mr. Donohue, noting that the town isn’t guaranteed the sale until the contract is signed.

The property, which sits at the terminus of Sunrise Highway and the start of County Road 39, has a listing price of $9.9 million, or $1.4 million more than the town’s agreed upon purchase price.

Mr. Donohue noted that he has shown the property in recent weeks to several parties who are interested in developing the land, which is zoned to allow up to 13 single-family houses, though a variance on the property allows for up to 25 luxury condominium units.

Mr. Donohue is advertising the property on the Douglas Elliman website as a “development opportunity with options.” The listing suggests that a tennis court, pool and clubhouse can also be built on the property as part of a residential development.

Town Councilman John Bouvier, who has been working closely with Town Supervisor Jay Schneiderman on finalizing the deal, explained this week that the town was required to get a new set of appraisals for the cluster of properties now that it intends to subdivide the largest parcel into three lots, creating preserved open space, a shellfish hatchery and a spot for a future cluster septic system.

The land must be subdivided so that the hatchery can be purchased by a third party, and the town can purchase the other parcel using CPF funds—general CPF fund for the open space, and water quality funds to clear the way for the septic system. The planned size of the parcels was not immediately clear.

“It’s a work in progress right now,” said Mr. Bouvier, who later added that he expects the Town Board to hold a public hearing on the proposed purchase as early as March.

Originally, Mr. Schneiderman put forward a plan to purchase the entire property with CPF funds, but he went back to the drawing board in the 11th hour to change the plans.

Mr. Schneiderman added that he has been meeting with certain groups, including Cornell Cooperative Extension, to decide who will operate the shellfish hatchery proposed for the site, and where the shellfish to be raised there would come from. Southampton Town Trustee Ed Warner noted in a recent interview that Cornell would be a good option, explaining that the Trustees regularly purchase shellfish from the extension to use in local waters, in part to filter nitrogen pollution.

The smaller parcel also would be subdivided: the sliver of land currently housing the Lobster Inn would be used for aquaculture and purchased by a third party, while the other part would be for a public marina purchased with CPF funds.

The fish farm property is expected to be purchased separately by Donna Lanzetta of East Quogue, who owns Manna Fish Farms, an open ocean aquaculture farm in the hamlet. Mr. Schneiderman said he approached Ms. Lanzetta to purchase the largest swath of the property, nestled between Sunrise Highway and Inlet Road West, as well as a sliver of land on the other side of Inlet Road West—the piece that houses the old Lobster Inn property—because she is the only person in town that he knows of that is interested in fish farming aquaculture.

Ms. Lanzetta has been working for years to kick-start her fish farming business and secured space in the water, about eight miles off Jackson’s Marina in Hampton Bays. Her goal is to address the environmental damage inflicted by destructive commercial fishing practices, and to ensure a dependable and natural food supply for the future. The space on the Lobster Inn property would help her move her practices forward.

Ms. Lanzetta is not directly partnering with the town for the purchase, Mr. Schneiderman said. The supervisor helped put Ms. Lanzetta in touch with Mr. Donohue to independently negotiate the sale, although the opportunity is open to others.

“I think she is a good choice,” Mr. Schneiderman said of Ms. Lanzetta. “I would not underestimate Donna.”

Mr. Schneiderman noted that the town still would purchase the development rights on the property so that the intended use, as an aquaculture farm, would be permanent.

Mary Wilson, the town’s CPF manager, declined to comment on the progress of the updated plan noting that she has “no new updates” to share.

The revamped project also includes plans to create a road that connects Inlet Road West and Inlet Road East—purchased with money from the town’s general fund—to help residents make a safer turn onto County Road 39.

With the purchase, the town plans to retain the marina and 48 boat slips that gives access to Cold Spring Pond and Peconic Bay. Plans also include using the westernmost portion of the property to host a cluster septic system to service approximately 50 homes surrounding it. That property, bordering an apartment complex on Sunrise Highway, could then be purchased with CPF water quality money. A portion of the parcel just east of that would be purchased using CPF money and preserved as open space.

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By knitter (1902), Southampton on Feb 7, 18 7:09 AM
Hope the deal falls through, CPF money should stopped being used to take tax-paying properties off the tax rolls.
By HamptonDad (236), Hampton Bays on Feb 7, 18 9:27 AM
1 member liked this comment
The place is worth half that
By chief1 (2786), southampton on Feb 7, 18 9:28 AM
Hasn't sold in years, don't jump into something that will AGAIN cost the taxpayers more and more money.
Jay you already have a buyer for the building? How about Cornell, who does a lot of work with the aquaculture here in southampton? Sounds like pay backs???
By knitter (1902), Southampton on Feb 7, 18 11:32 AM
1 member liked this comment
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